In an election cycle full of surprises, Election Day 2016 proved to not disappoint. In the wake of the election, here is a summary of state-level election outcomes that could have an impact on economic development policy. As newly elected officials take office in the beginning of 2017 we will be tracking specific changes to state economic development policy.

Overall, Republicans outperformed expectations all the way down the ballot. Republicans will maintain a similar level of control, in a year when many expected Democrats to make gains at the federal and state level.

Legislative Seats

On Election Day, there were 5,915 regularly scheduled elections for legislative seats in 44 states – making up more than 80 percent of all the 7,383 state legislators nationwide. The only legislators not on the ballot this year included Alabama and Maryland, who were elected in 2014 and serve four year terms, the Michigan Senate, and all lawmakers from Louisiana, Mississippi New Jersey and Virginia, whose states hold legislative elections in odd-numbered years.

Going into the election, Republicans controlled 67 of the nation’s 99 legislative chambers, and Democrats controlled 31. (This does not include the nonpartisan legislature in Nebraska.)

Below is a summary of the eight chambers with changes to party control. This reflects a lower then average partisan turnover over the last century, where an average of twelve chambers changed hands during presidential election cycles

Three chambers switched from Democratic to Republican control:

• Kentucky House
• Iowa Senate
• Minnesota Senate

Four chambers switched from Republican to Democratic control:

• New Mexico House
• Nevada Assembly
• Nevada Senate
• Washington Senate (Republicans, however, will maintain functional control as one Democrat will caucus with the Republicans.)

One chamber will be tied between the parties:

• Connecticut Senate

Gubernatorial Races

Of the twelve gubernatorial races this year, Democrats defended eight races to the Republicans’ four. Leading into Election Day, the Cook Political Report rated half of the races as toss-ups with four in states held by Democrats and two held by the GOP.

Of the five competitive gubernatorial contests in 2016, GOP candidates won four:  Eric Holcomb in Indiana, Eric Greitens in Missouri, Chris Sununu in New Hampshire and Phil Scott in Vermont. Only in North Carolina did the Democratic nominee, Roy Cooper, come out ahead of the Republican, incumbent Gov. Pat McCrory, in a race that is still considered too close to call. Assuming Cooper wins, Republicans will have achieved a net gain of two governorships, yielding a partisan split of 33-16-1. In either case, the results of the election give the GOP the highest number of governorships since 1922.

Next year, gubernatorial elections will be hosted in Virginia and New Jersey, And in 2018, 36 states are scheduled to vote for the highest state office.

Key Ballot Measures

Voters in 35 states voted on 154 statewide ballot measures this election cycle. Of those, 73 were initiatives placed on ballots as a result of citizen signature drives and 75 were legislative referendums.

Relevant to incentive policy, Economic Development Issue 3 was passed by voters in Arkansas allowing for more flexible tools and partnership in state, regional and local incentives support. The provision also removes the 5% budgetary cap on incentives for large economic development projects allowing higher values and more flexibility.

With respect to tax policy, four states voted on increasing corporate or income taxes -- with provisions passing in California and Maine but failing in Louisiana and Oregon. Oklahoma voted down a sales tax increase and Missouri passed a provision to prohibit new sales and use taxes. Lastly, Washington state voted down a carbon emissions tax.